Jeffrey D. Sadow is an associate professor of political science at Louisiana State University Shreveport. If you're an elected official, political operative or anyone else upset at his views, don't go bothering LSUS or LSU System officials about that because these are his own views solely.
This publishes five days weekly with the exception of 7 holidays. Also check out his Louisiana Legislature Log especially during legislative sessions (in "Louisiana Politics Blog Roll" below).

4.7.18

This column publishes every Sunday through Thursday around noon U.S. Central Time (maybe even after sundown on busy days, or maybe before noon if things work out, or even sometimes on the weekend if there's big news) except whenever a significant national holiday falls on the Monday through Friday associated with the otherwise-usual publication on the previous day (unless it is Thanksgiving Day, Independence Day, Christmas, or New Year's Day when it is the day on which the holiday is observed by the U.S. government). In my opinion, in addition to these are also Easter Sunday, Memorial Day and Veterans' Day.

With Wednesday, Jul. 4 being Independence Day, I invite you to explore the links connected to this page.

For decades prior to Edwards entering office, the Board of
Commerce and Industry that oversees granting the break routinely would
forward to governors a recommendation that the company enjoy a 100 percent
deduction for five years, with the possibility of five more. Early in his term
he promulgated an executive order saying he would grant only partial relief for
three years after the initial five years, and that four kinds of local governments
involved could opt out.

However, this led to a patchwork of decision that
complicated matters and added to uncertainty. Afraid this discouraged increased
business activity, the BCI – comprised of a majority of Edwards’ picks – at the
governor’s request approved new decision rules. Henceforth, a break of 80
percent will last all ten years, and the local governments between 30 and 60
days of the application can veto that for their taxes.

In part, a significant reduction in requests
prompted the change. Things may pick up slightly with greater predictability
built into the process – or may not, given now no break will happen up front, discouraging
firms who have higher initial costs.

But none of this addresses the fundamental problem
involved: business pays way too much of all property taxes in Louisiana, approaching
90 percent. By way of example, according to 2015
data New Orleans had, among the largest cities in all 50 states plus the
District of Columbia, the 40th highest effective rate (assessed rate
adjusted by exemptions) for homesteads, the 29th highest for apartments,
the 25th highest for commercial property, and the 10th
highest for industrial use. The preference for homesteads also appears in the
ratio of effective rate for homesteads versus commercial property, where New Orleans
ranked eighth.

This imbalance deters investment, and so to
compensate in part the state has ITEP. Still, that’s not enough, and effectively
raising it won’t make matters any better, even if that offsets the
over-complexity of the rules for the last two years.

Only by amending the Constitution to lower the homestead
exemption – preferably through something like shielding the first $10,000,
taxing the next $10,000, then exempting up until something like $60,000 – followed by a mandated reduction of rates will
create a more realistic taxation structure. At first, total revenues taken in
by each jurisdiction would not change, but because business property taxes would
decrease these savings would come back to consumers to compensate for increases
on many. Better, it would attract more business formation, relocation, and
expansion that would stimulate future economic growth and tax revenues.

Then the state could toss the entire ITEP concept,
or perhaps scale it back considerably. Tinkering with it at the margins, that
in fact may make it less effective, won’t encourage business development the
way fundamental reform will. Edwards’ cosmetic alterations do nothing to aid
the country’s worst economy.

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